PE companies to raise Rs 20,000 cr for affordable residential projects
Several private equity (PE) firms are focusing on the residential real estate segment to raise a cumulative amount of Rs 20,000 crore to deploy in the affordable to the mid residential segments projects in India. Some domestic and Alternative Investment Fund (AIF) raised include ASK Property Investment Advisors, Motilal Oswal, HDFC Capital Fund, Kotak Investment Advisors and Gruhas Proptechand Lumos. CEO and Managing Director of ASK Property Investment Advisors (ASK PIA), Sunil Rohokale, told the media that the demand for residential housing has revived after five years. Private equity and AIF should help the real estate industry grow faster. The sector also needs patient and flexible long-term capital to ensure project completion. The fund launched the company's new real estate fund, ASK Real Estate Special Opportunities Fund-IV. It targets Rs 1,500 crore funds for deployment in affordable and mid-segment residential segments and mix-use projects. Motilal Oswal Real Estate (MORE) has raised Rs 1,200 crore through the first closure of its fifth real estate fund, India Realty Excellence Fund V (IREF V). The company had expanded its fund size due to larger interest from investors. Kotak Investment Advisors Limited (KIAL) had raised Rs 2,770 crore in its 11th funding round. It aims to invest in early and late-stage real estate projects in the residential, commercial, retail, warehousing and hospitality sectors. The smart recovery in the residential segment post-Covid-19 pandemic has led to the growth of investments in the sector. The residential sector had attracted 2.3 times investments at $1.08 billion in 2021, compared to $460 million a year ago. According to Chief Economist at Jones Lang LaSalle (JLL) India, Samantak Das said property sales in 2021 increased by 72% year-on-year (YoY) and sold 128,000 units in the entire year. It reached about 90% of the pre-Covid 2019 sales levels. Image Source
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